Category: History || By

(One in a series. See also Part 1 and Part 2.)

In a 1997 profile, American Heritage wrote that George Westinghouse "would have hated today's corporate downsizing." Once, during an economic downturn, Westinghouse put his employees to work sawing wood by hand rather than lay them off.

Speaking of his invention of the railroad air brake, Westinghouse famously said: "If someday they say of me that in my work I have contributed something to the welfare and happiness of my fellow men, I shall be satisfied."

Also attributed to Westinghouse is this quote: "I want every man who works for the company to understand that I look upon him as a part of our organization, and not as a mere mechanical time-server. His interests are ours, and ours are his."

. . .

F.A. McKenzie, a writer for the Daily Mail of London who became a celebrated war correspondent for the paper, spent two days in 1902 touring Westinghouse's factories in the Turtle Creek Valley to "learn the secret" of his success.

McKenzie concluded that besides Westinghouse's inventive mind and ambition, "there (was) no secret" beyond paying and training his workers well.

"Men who imitate his foresight and care can safely reckon on accomplishing great things," McKenzie said.

. . .

Dissatisfied with the shabby towns that sprang up around the Mon Valley's steel mills, Westinghouse decided that the settlement next to Westinghouse Air Brake Co. would be special. As a result, Wilmerding became one of the world's first "planned communities," carefully allocating space for parks, schools and recreation centers. Houses erected by "the Air Brake" were sold to workers at near-cost.

(According to local legend, planners wanted to call it "Westinghouse Borough." The founder demurred. "I don't need to pick up the newspaper some day and read, 'A man was murdered in Westinghouse last night,'" he said. Instead, they named it "Wilmerding" after Joanna Wilmerding Negley, wife of attorney William Negley, one of Westinghouse's investors.)

Despite some ill-advised urban renewal in the 1960s, the heart of Wilmerding remains just as George Westinghouse intended, with a big town square, straight streets and at the center, "the castle" --- the former general office building for the "Air Brake." George's office remains preserved in the tower.

. . .

The founder of Westinghouse Electric, Union Switch & Signal and Westinghouse Air Brake, an industrialist, an inventor, a pioneer in both AC power and natural gas, and a multi-millionaire, George Westinghouse also was a humanitarian.

It was the last quality that made George Westinghouse unpopular with his contemporaries.

Naturally, when Westinghouse Electric got into financial trouble in the early 1900s and was forced to borrow money from Pittsburgh banks, one of the bankers' requirements was getting rid of George Westinghouse. He was asked to resign from the corporation in 1907.

Seven years later, Westinghouse died of a heart attack, at home, while working on plans for an electric wheelchair.

. . .

If George Westinghouse would have hated downsizing, he would have really despaired of what became of Westinghouse Electric Corp. in the 1980s.

Beginning in the late 1960s, company unceremoniously shed thousands of jobs as it dumped product lines, one after another.

By the mid-1970s, the company that invented and built the TV cameras that went to the moon with NASA astronauts no longer made any TVs.

Back in the founder's day, Westinghouse Electric had thrived by hiring hard workers and cultivating their talent.

Westinghouse "year by year takes in numbers of the foremost technical students from the American colleges," McKenzie reported back in 1902, after visiting East Pittsburgh. "These are put at practical work ... through every branch of the factory ... and they become the Captains in this industrial army."

. . .

But in the late 20th century, Westinghouse was focused cultivating the stock market, not talent. It continued to hire the "foremost" students, trained them and sent them elsewhere.

John Swanson was a young engineer at Westinghouse's Astronuclear Division on Route 51 who had an idea for computer software that could automatically analyze complicated systems and predict when they would fail. Because Westinghouse wasn't interested, he used the company's computers after hours to test his ideas.

Then Swanson left Westinghouse to found ANSYS Inc. (as in "ANalyzing SYStems") in his garage in Elizabeth Township.

Now based in Southpointe, near Canonsburg, ANSYS did $122 million worth of business in the second quarter of this year. Last week, ANSYS was named one of the top technology companies in the United States by the Deloitte consulting firm.

. . .

Rather than cultivating in-house talent, Westinghouse tried buying innovations. It acquired companies like Information Associates, a software developer, and Unimation, which built robots. They were stinkers.

Desperate to pump up its operating margins, Westinghouse Electric leaned even more heavily on its commercial-lending arm, Westinghouse Credit. It loaned money to Florida real-estate speculators, entering the market just before the bubble burst in 1990.

And it backed Youngstown's Phar-Mor discount chain, which did a spectacular face-plant, taking with it $100 million in Westinghouse's money.

. . .

One of the few bright spots had been Westinghouse Electric's chain of radio and TV stations. After all, the company had been involved in broadcasting from the very beginning. It owned the world's first commercial radio station, KDKA, as well as top affiliates in many of the country's biggest markets --- New York, Boston, Philadelphia, Los Angeles.

As the U.S. Congress relaxed laws that limited the number of TV and radio stations that could be owned by a single company, Westinghouse Broadcasting kept growing.

Westinghouse Electric's inability to hang onto its technological leadership was creating a vacuum inside the company, and the entertainment arm was only too happy to fill the void.

That would ultimately cause the company --- at least as Pittsburghers knew it --- to implode.